Michael Townes Watson

Tennessee Tort “Reform” is Misguided

The magazine Nashville Scene, in Nashville, Tennessee, reports on two bills in the legislature, to be voted on next week. Tennessee is just one of six states in which we already know the insurance industry is again pursuing caps on non-economic damages in medical malpractice cases. The principal bill backed by the Tennessee Medical Association (TMA), would cap "non-economic" damages at $250,000, just like the legislation that has been attempted all over the country, has already been passed in several states, and has been passed several times in the U.S. House of Representatives, only to be narrowly defeated in the U.S. Senate.

The TMA's position is that "frivolous lawsuits" and out-of-control jury awards are "jeopardizing access to health care" in Tennessee, and that doctors are closing their practices because of "increasing medical malpractice insurance premiums and climbing jury awards." The TMA also claims that the cost of malpractice litigation is out of control because of both the direct costs of malpractice litigation and the "defensive medicine" practiced by doctors who order tests or procedures that might not otherwise be strictly necessary.

The Tennessee Trial Lawyers Association (TTLA) responds with many of the same arguments that apply across the nation when the insurance industry brings the proposed reforms for a vote:

(1)--Very few cases are actually decided by juries, moreover—only 5 cases went to verdict in 2005—so it is difficult to sustain the contention that jury verdicts are out of control. On the other hand, 444 cases were settled in 2005, the medical malpractice insurance carrier presumably settling because it saw probable proof of liability. Of the payouts in 2005, $120 million was in settlements, $6 million from jury awards—a ratio of 95 to 5 percent.

(2) In a 2006 report by the Department of Commerce and Insurance of Tennessee, the number of physicians practicing in Tennessee actually increased from 218 per 100,000 population to 260 per 100,000 between 1991 and 2001. While doctors experience some financial pressures, their difficulties stem in large part from radically lowered reimbursement rates under managed care, Medicaid and Medicare.

(3) Good doctors are paying for the sins of bad doctors--insurance companies do not "experience rate" their premiums, meaning that the premium is not calculated on the quality of care the doctor provides. Instead, all doctors wind up paying for the negligence of the few doctors who actually commit malpractice. Just as across the nation, more than half of malpractice claims come from only five percent of the doctors.

(4) The claim of "defensive medicine," is not realistic. The Congressional Office for Technology Assessment found that less than eight percent of the total cost of healthcare in the U.S. is affected by the practice of defensive medicine. Actual malpractice payouts, for both meritorious and "frivolous" lawsuits, amounts to about one-half of one percent of the total cost of health care, according to the Consumer Federation of America and the Congressional Budget office.

(5) Large verdicts are always widely covered by the media, but when a trial judge or appellate court reduces the award, (e.g. the multimillion dollar verdict in the McDonald's "hot coffee" case, which was ultimately settled for about $300,000), no one ever learns about it.

But, rather than just opposing the insurance industry bill, the TTLA supports doing something about frivolous claims and frivolous defenses. They back a bill that calls for both plaintiff and defendant in a malpractice case to file sworn affidavits within 90 days of suit from a competent expert witness (i.e. another physician with expertise in the defendant's specialty either from Tennessee or a contiguous state) who, having reviewed the evidence in the case, can state that the defendant's conduct either did or did not fall below the standard of care expected of a practitioner under the same circumstances. If the plaintiff cannot secure such an affidavit, his case is dismissed; if the defendant cannot secure such an affidavit (assuming that the plaintiff can), liability can be assigned to defendant by default. Yet, the TMA, regrettably, opposes this effort to do away with the frivolous actions of plaintiffs and defendants, either of which contributes to the overall cost of medical malpractice coverage.

The battle in Tennessee is the same as the battle across the country, even though we are seeing increasing reports of the prevalence of medical error. Some in the healthcare community are beginning to understand that one of the biggest reasons for the high cost of medical care is the avoidable mistakes that necessitate additional unnecessary care, the cost of which is objectively far more than any measure of “defensive medicine.” The recent CBS Evening News special reported on the efforts of Dr. Donald Berwick, a Harvard-trained pediatrician, chairman of The Institute for Healthcare Improvement, who says, "Hospitals are very dangerous places.” He believes that we can avoid 5,000,000 deaths and injuries every two years if hospital safety measures are taken.

Public Citizen, using the data collected by the National Practitioner’s Data Bank (where information about all medical malpractice settlements is reported by law), concluded that the “medical malpractice crisis” is, and always has been a “HOAX.” http://www.citizen.org/documents/NPDB%20Report_Final.pdf. They say the true figures show, among other things, that:

a. the Annual Number of Malpractice Payments Is Down
b. Medical Malpractice Payments per Population Continue to Decline
c. Total Value of Malpractice Payments is Flat Since 1991
d. Judgments Are Not Irrational
e. Million-Dollar Judgments Are Less Than 1 Percent of the Total Number of Payments
f. Million-Dollar Judgments Were Less Than 3 Percent of Total Value of Payments in 2005

When the Harvard Health Study Group concluded last year that, contrary to public perception, the courts are not clogged with frivolous medical malpractice lawsuits, we should begin to see the insurance industry’s house of propaganda cards begin to fall. The problem is not the malpractice litigation system; the problem is the malpractice.

We should not be wasting resources debating things like caps on damages, when there are 190,000 people killed each year by hospital mistakes, and 90,000 people killed each year by hospital-acquired infections. We should be using those resources to fix the problems in healthcare delivery, not blaming the cost of healthcare on the injured patients.

Comments

The proposals you refer to were not the last word in Tennessee. News broke this morning of a possible compromise that may represent a new approach to the entire debate. We would be interested in thoughts from those on any side of the issue about how the docs and lawyers appear to be coming together in our state.

Tom: Thanks for your comment about the development on the Tennessee med mal issue. I read the article that you referred to. Clearly it means that the propaganda of the insurance companies is not having the effect that it has had in the past when legislatures rolled over and played dead by passing whatever the insurance companies wanted. Let's all keep and eye on what is going on in Tennessee, Oklahoma, Arizona and Maryland--the states where the insurance companies are working hard to get what they want. Michael Townes Watson

Non-meritorious payments (may be the insurance companies found the probability of error)= (0.28 X 444) X 120,000,000/444 = 33.6 million
Pocketed by lawyers at 35 % rate = 11.76 million in year 2006 in Tennessee from cases , which shouldn’t be there in the first place.
Can it be a reason why TTLA is so ballistic over this to maintain the status quo ?